With the pessimism that has ruled the markets since crude oil's fall through 105.00 and the Dow Jones Industrial Average's slip from 13,338 and through 13,200 and then through 13,000...is it too crazy a notion that the risk environment about to shift, again?
The chart's tell the story, most especially the chart of the daily YM Dow futures.
The daily Dow remains in a chopping range-bound market and as pessimistic as I was as prices (and news) was at its most optimistic, I have to be a expect some buying support as prices trade into the multiple layers of support; this market is nearing being oversold.
The Dow's not alone in the bearish hesitancy...crude oil's feeling a little shy below the 200DMA. No momentum lower despite three candle wicks that pierces this key support level.
Crude's meltdown preceded this risk OFF environment and the lack of selling momentum through the 200DMA may be a small sign that the equities market is ready to bounce higher into the sideways range.
This is not a question of being a bull or a bear BUT RATHER RESPECTING THE FACT THAT NEITHER HAS CONTROL OVER LONGER TERM PSYCHOLOGY.
By the way, I still feel that path of least resistance it down for risk so more aussie weakness, equities weakness, euro weakness...and yen strength. That means that any bounce could simply be another opportunity to set up longer term time (four hour and daily) frame trend following shorts on the EUR/JPY, AUD/JPY, AUD/CAD, AUD/USD, and USD/JPY.